Moneymen find profit in firings
Saturday 15 February 1997
One of the star performers in Frankfurt's bull run was Siemens, a large exporter of German electrical goods and jobs, which announced a leap in profits. Siemens sacked 6,000 workers last year, but wants to raise its return on investments to American levels by the year 2000. To get nearer that goal, the company will fire another 6,000 of its employees by the end of the year.
This is not how things are supposed to be done in Germany, the home of "Rhenish capitalism" which puts the workers' interests first, the bosses' second and shareholders' last. The model gave the world the economic miracle and almost unparalleled prosperity, built on harmonious labour relations, a cartel-like economy of cross-ownership, and consensus politics.
The system suited everybody for five decades, but it no longer suits the moneymen. An increasing number of German companies, their managers bewitched by Anglo-Saxon phrases, such as "shareholder value" and "globalisation", are forsaking the German model.
The malaise of down-sizing is spreading from the north, cutting across the Ruhr, and its effects can even be felt in the land of the "sunrise industries" in the south. Bavaria and Baden-Wurttemberg, where the unemployed might have been heading a few years ago on their bikes, both have a higher jobless rate now than Britain.
As for the East, the trillion Deutschmarks invested since unification has failed to create more jobs than Poland, Hungary and the Czech Republic achieved without the help of German tax-payers.
There are, of course, many affluent oases on this bleak landscape. Parts of eastern Germany now boast the most modern production methods in the world, which in years to come will pay rich dividends. The chemical sector in the West is booming, there are jobs galore in biotechnology and computing, and car manufacturers are conquering new markets and holding their own at home.
But those that remain successful have done so by shedding labour, often in the teeth of resistance from unions and politicians. Volkswagen started from scratch in eastern Germany, negotiating wages and work practices that would not be accepted by western unions. Daimler-Benz, the country's largest industrial concern, has sacked tens of thousands of workers on its way towards renewed profitability.
White collar unemployment is still rare, but it is coming. Jobs in the public sector which used to enjoy civil-servant status are increasingly being offered on a contractual basis. There are openings in the service sector. New hotels in eastern Germany are seeking receptionists.
Economists and long-suffering consumers agree that there is scope for improvement. There must be thousands of unemployed hairdressers, yet you cannot get a haircut in most of Germany on Mondays.
Will customer-friendly hairdressers save Germany from ever-higher levels of unemployment? Some experts doubt it. "The trouble is that jobs are simply disappearing faster than they are being created in services," says Peter Frieburg of Duisburg's labour exchange. But at least there are bound to be new opportunities in the leisure industry.
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